Finally, a budget plan that works for Alaska

Kudos to Rep. Paul Seaton, Rep. Neal Foster, the House Finance Committee and the House majority coalition for their proposed solution to Alaska's fiscal crisis.  Thank you! Finally we have a solution that looks at the whole problem.

[Deficit-cutting plan from House majority used income tax, Permanent Fund earnings]

On Friday the House majority introduced House Bill 115, the State Revenue Restructuring Act. This bill would use two major sources for state revenues that together would cover 80 percent of the state's current $2.7 billion deficit. And it protects the Permanent Fund dividend.

To do this the bill calls for restructuring how the earnings of the Permanent Fund will be used. The annual draw from the Permanent Fund earning reserves would be 4.75 percent of the market value of the entire fund. This is a safe, conservative figure that will allow the fund to continue to grow in the future.   Two-thirds of this draw or $1.52 billion would go to the state's general fund to cover state operations such as education, public safety, and road maintenance and plowing.

[Balanced fiscal plan sustains good life in Alaska]

The second major revenue source would be a progressive income tax of 15 percent of your federal tax. This is slightly less than we paid in the 1980s. This would generate an estimated $655 million annually, part of which will be paid by nonresidents. This is fairer than a sales tax because a sales tax hits those who are least able to pay hardest. In addition, most communities other than Anchorage already have a sales tax, which would put a double burden on the residents of those communities.

This leaves a remaining deficit of about $500 million, a much more manageable amount to cover with smart budget cuts (e.g. travel for legislators and state employees?), reduction in oil tax credits and other taxes such as alcohol, tobacco and gas.


The remaining third of the draw on the Permanent Fund earnings would go to pay the dividend. The 2018 dividend would start at about $1,100 and would grow sustainably over time. Those of us who pay income tax could choose to do so with our dividend, which would cover the tax for many of us.

The House Finance Committee is holding a hearing on HB 115 at 1:30 p.m. Friday. You can testify by going to the Legislative Information Office (2nd floor, Wells Fargo building, 1500 W Benson Blvd. at the corner of Benson and Minnesota Drive) at 1:15 p.m. You can also testify by phone; call 907-586-9085. Or send written testimony to housefinance@akleg.gov, with copies to your own legislators (subject line: written testimony HB115).

Please support this bill. It will ensure an Alaska where our children and grandchildren can stay.

Helen Nienhueser is retired from the Alaska Department of Natural Resources and is the co-author of "55 Ways to the Wilderness in Southcentral Alaska." She also serves on the board of Alaska Common Ground. The views expressed here are her own.

The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com.   

Helen Nienhueser

Helen Nienhueser was the leader of the campaign to legalize abortion in 1970 in Alaska, three years prior to the Roe decision. She lives in Anchorage.